Settling a DMP - Settlement Offers

sharpeye

I have been in a DMP for 2 years, and we are about to move house which will free up some equity, giving me a lump sum to settle my DMP with Step Change.

I owe around £9,000 from an original debt of £22000.

I have 7 creditors, 5 of whom issued defaults, and 2 who didn't.

Am I allowed, or maybe is it possible might be a better phrase, to settle the 2 non default accounts in full (this means I can keep the accounts open to possibly help to slightly improve my credit file over time), but offer partial settlement offers to the other 5 (as they defaulted they are on my credit file for 6 years regardless of whether i settle or not)?

If so how would I go about this? Would Step Change deal with this or should i approach creditors direct to make offers?

Any advice appreciated

WhenIam64

You appear to be suggesting preferential treatment of certain creditors. A quick call to SC will clarify why that is not a wise move.

sharpeye

Not quite. I’m querying the difference between keeping the non defaulted accounts open, but settling defaulted ones that are closed for less as they have been sold on to debt collection agencies

WhenIam64

Can understand the logic to this, and it may be that some will accept early settlement but what did Stepchange say when you asked them the same question?

sourcrates

sharpeye wrote: »

Am I allowed, or maybe is it possible might be a better phrase, to settle the 2 non default accounts in full (this means I can keep the accounts open to possibly help to slightly improve my credit file over time), but offer partial settlement offers to the other 5

Yes, you can do anything you want to do, however, you will be doing it without stepchange.

They would want you to pay the lump sum up front to them, and then they would distribute that money between your creditors, you would have no control over it, there would be little in the way of negoatiation, and you would not be able to do what you wanted to do in regard to the non default accounts.

Stepchange have basically one job to do, they exist, to offer debt repayment services paid for by the creditors, to get you out of debt as quickly as possible, and they would insist on all creditors been treated fairly, that is there modus operandi, there reason for being.

If you have the money to settle these 5 defaulted accounts, then you no longer need the services of stepchange do you, you simply do it yourself, and keep open the two non default accounts, there job is now done where you are concerned.

So your question is a mute point really, its what you choose to do now, nothing to do with stepchange at all, you can remove all ties to them as there job here, is done..

Make your settlement offers in writing (National Debtline has a fantastic template letter just for this purpose) start low, you can always increase the offer, do not divulge where the funds have come from, if they ask, its a gift from a family memeber, your objective now is to obtain as low a settlement as possible on these 5 defaulted accounts, never accept a first offer, there is always room to manouver, good luck.


Link here to that template letter :


https://www.nationaldebtline.org/EW/sampleletters/Pages/Full-and-final-settlement-offers-%28sole-name%29.aspx

sharpeye

fantastic

that was my line of thought, just wanted to make sure i wasn't missing anything.

Thanks for your input much appreciated

WhenIam64

just wanted to make sure i wasn't missing anything.

Perhaps SC will advise the assumptions made when giving the information - "you can do anything you want to do".

sourcrates

WhenIam64 wrote: »

Perhaps SC will advise the assumptions made when giving the information - "you can do anything you want to do".

Mearly that we live in a free country and the OP is perfectly entitled to stop using the services of stepchange subject to any notice requirements, whenever they choose, the situation as they describe it, is best dealt with, by themselves.


If they choose to settle defaulted accounts and leave the non default accouints open, they can do so without having to ask anyones permision.

WhenIam64

Mearly that we live in a free country

We do - surrounded by legislation regarding debt; the collection of debt; and the lawful repayment of debt.

I will admit the risk is towards to the very lowest levels but the risk is there.

This is not a complaint about the excellent and insightful advice you give. I have a lot of time for your advice. It is more of an observation about the uninsured advice of armchair experts who might not be aware of the intricacies of the law. It is an MSE flaw that has been there since the beginning.

sourcrates

WhenIam64 wrote: »

We do - surrounded by legislation regarding debt; the collection of debt; and the lawful repayment of debt.

I will admit the risk is towards to the very lowest levels but the risk is there.

This is not a complaint about the excellent and insightful advice you give. I have a lot of time for your advice. It is more of an observation about the uninsured advice of armchair experts who might not be aware of the intricacies of the law. It is an MSE flaw that has been there since the beginning.

Well I do value opinion that differs from my own, it would be a boring place without debate, wouldn’t it, maybe I do over simplify things occasionally, and you are right to pick me up on that.

However I cannot see how any of that applies in the OP’s case, it’s a simple case of settlement of the debts she’s wants to settle, and the continued use of the lines of credit that did not default.

What law would she be breaking ?

sharpeye

Im a he! I must say these forums can be quite judgemental at times.

Im not trying to be intentionally dodgy. I would simply like to maintain the accounts that didn't default, and so realise that they need settling in full, but the defaulted accounts have all been sold to DCA's, I assume at a reduced rate, and they are also all businesses who i attempted to speak to to avoid the default but it fell on deaf ears, so I don't feel bad offering a reduced settlement figure in an attempt to save money.

I simply wanted some clarity on the mechanics of it, and will happily make my own decision on how to proceed.

Considering my situation, the fact that I am still being targeted to open new credit accounts tells me all I need to know about the morals of these large credit providers, and so i'm afraid I don't feel bad about offering reduced settlements. All's fair in love and war as the saying goes!